Abstract: Exploiting heterosis is one method to increase cotton yield that has stagnated in recent years. One primarily to difficulty of producing F1 seed, use of heterosis in cotton (Gossypium hirsutum L.) has been limited. The objective of this study was to evaluate the potential of using F2 hybrids by comparing them with parents, commercial variety and F1,S for yield, yield components and fiber quality. The second objective of this study was to determine if parental research organization of origin was related to mid parent and useful heterosis. The genetic design was a half diallel consisting of six parent (evolved by different research organization), 15 F1,s and 15 F2,s. The 36 genotypes were grown in 2002-2003. Yield, yield components fiber length, strength and micronaire reading were determined. The highest yielding parent was FH-901 (3517 kg ha-1) with good yield components (recommended commercial variety for general cultivation), while the variety Reshmi had best quality traits among these parents. The cross combinations MNH439 X CIM-448, FH-901 X CIM-448 and NIAB-78 xX CIM-448 showed minimum inbreeding depression (-34.6, -20.0 and -21.8%, respectively) for seed cotton yield. These crosses also showed less inbreeding depression for yield components and fiber traits than expected inbreeding depression i.e 50.0%. General combining ability mean squares were significant for all traits and specific combining ability mean squares were also significant for all traits except boll weight and fiber strength. The GCA effects were higher than SCA effects for all traits, which indicated that additive gene action is prevailing with dominant for expression of these traits. The variety CIM448 was the best general combiner for the yield and yield components.